April 2010 Archives
The government should sell our shares in the banks now. Today. Cash in the chips - quick!
When we stuck ÃÂ£billions into the banks at the height of the crisis an RBS share was worth less than 11p and Lloyds went to as low as 20p.
Last night (and pretty unbelievably) RBS hit 58p and Lloyds went above 70p.
Their value has increased 75% in no more than two months. ÃÂ£26bn was calculated as the combined loss on both stakes at the end of last year. It's now a profit of ÃÂ£9.4bn.
The Guardian has calculated that the profit on the 84% stake in RBS last night stood at ÃÂ£7.4bn while the taxpayer's 41% share in Lloyds was worth almost ÃÂ£2bn more than the Treasury paid for it. The fees charged by the government to the Banks announced in the budget has added further value.
The government should get out now. The dead cat is in bounce but will splat back onto the pavement before too long.
Being on holiday, I've had the chance to debate few nights ago with some academic researchers the 2009 Reith Lectures, and the challenges that arise when politics is observed through the lenses of Markets and Morality (e.g. the MPs' expenses scandal and 'Politicians for hire')
Then I came across this farewell note of Clare Short MP (Birmingham, Ladywood) and I've asked myself: After 27 years of services, if tomorrow she starts a new career as a lecturer in political sciences, what would she teach to students who aspire one day to take the Oath of Allegiance? Would Clare teach them the theories on democracy, ethics and how the parliament is supposed to operate as described in the textbooks, or would she teach them the true rules of the game in the political arena?
One of the most interesting things I saw whilst stuck in Washington DC last week was the coverage of the US Senate Permanent Subcommittee on Investigations in its detailed look at the credit ratings agencies.
If the banks were the former Masters of the Universe, the credit reference agencies were their side-kicks.
Post blogger John Clancy has taken them to task for their role in the economic implosion that engulfed us all in late 2008. Now the real detail is starting to come out.
US politicians on the Committee are digging into what went wrong, and last week unearthed piles of emails and communications from the big ratings agencies over the last few years.
As one employee at Standard & Poor's, the biggest of the rating agencies put it, the firm's handling of awkward questions back in the summer of 2007 made it "sound like the Nixon White House".
We're home at last despite the worst efforts of Air France / KLM. We finally got on a flight on Saturday and arrived home yesterday.
Perhaps the funniest moment of the whole affair came when - finally - checking in at Dulles airport the Delta/Air France/KLM/Whatever-Next check in person told us I was overweight (yes OK I do have a few pounds to shed as my doctor will confirm).
When I eventually realised she meant my suitcase I was a tad surprised as I was carrying less weight than I came out with, having ditched various papers en route, and was now well below the 30 kg allowance I was told I had on departure from Brum ten days before.
After the second leaders debate, I'm still left wondering whether these unprecedented media events are good or bad for UK democracy.
I can help but think that if Sky add three celebrity judges, a premium rate phone line and have a results show, perhaps an hour later, to remove the worst candidate from the next debate - they could have a seriously good game show on their hands!
Admittedly the studio audiences are not allowed to heckle or clap, but the x-factor-meets-blind-date format is starting to disturbing me.
Foggy Bottom Washington DC has become Soggy Bottom DC as it's raining cats and dogs. Still, the House of Congress Library (whose magnificent Reading Room has featured in books like Dan Brown's 'The Lost Symbol' and the films such as 'All the President's Men') is a stunning respite from the rain outside...
We're still on for coming home at the weekend, the marvellous Coop Travel tells me, so I'll hopefully be back soon to enjoy all the election drama (who said politics was dull?).
Business news here is dominated by the Goldman Sachs affair - which may strengthen Obama's hand in trying to regulate the financial system - and IMF proposals to tax the banks. The latter is necessary as it was the excessive risk taking of the banks which got us into his mess (I mean the financial mess not the Icelandic volcano).
Banks in effect have imposed a negative 'externality' or toxic 'spill-over' on the rest of the economy, and we should not have had to bail them out. In the future they will have to be taxed so as provide a rescue pot in case things go wrong again.
Greetings from Foggy Bottom, Washington DC. We're still stuck here awaiting a flight home after the IceSave-Eye Full Volcano got its own back on Europe... fingers crossed we'll get on a flight on Saturday if the wind is still blowing in the right direction.
We're now scheduled to fly via Amsterdam, so in the event that we get to Holland but then can't fly to the UK, I've warned an old mate from Kibbutz days (that was over twenty years ago) that he needs to clear out the accumulated junk in the spare bedroom and be on stand-by for a guest...
Other than working today we went to Georgetown and had lunch by the river. It was a glorious day.
One thing that has struck me about Washington streets is how many British-made cars there are on the roads. It's not something I've ever noticed before in the US.
Greetings from Foggy Bottom, Washington DC. I'm stuck here at the moment awaiting a flight home after the Volcano with an unpronounceable name blew its top...
Imagine 7000 geographers in town and a volcano blows, stranding lots of UK and European academics; we looked in the bars for geology and volcano experts to tell us how long it would all last. 'You cannot be serious' (a la McEnroe) was the answer.
On one level, it's a welcome relief to see the election knocked off the front pages. But it's Iceland once again dominating the headlines. With memories still raw from the treatment of our savers at the hands of its banks, this time it's our travellers who find themselves at the mercy of one of the country's unpronounceable volcanoes.
Well, insurance companies are already doing what they do best - trying to get out of their insurance contracts and leaving their customers literally and metaphorically stranded, and even high and dry.
Travel insurance companies are clearly cleansing themselves of any responsibility for compensating for ruined holidays because the eruption of Iceland's EyjafjallajÃÂ¶kull Volcano is 'an Act of God'.
That's exactly what some are saying to their customers today. (My Brother- and Sister-in-Law, about to fly off this afternoon to a holiday-of-a-lifetime in Borneo were told exactly that by Direct Travel Insurance.)
Note that the Iceland Volcano is an Act of God. The closure of airspace is an act of the civil authorities; the civil aviation authorities, to be exact.
If my house, land, car, life etc. is directly destroyed by a volcanic eruption (i.e. in its vicinity, its earthquake, in the path of its lava) then I might be able to understand that there might in my policy be in existence a ridiculous (but apparently widely accepted) provision that Acts of God are excluded.
They might have a point if this actual Icelandic volcano's volcanic ash drifted southwards and actually landed on my garage roof and destroyed it.
But at what stage does the Act of God simply become a human reaction to an Act of God?